A comparable has a cash-equivalent sale price of $680,000. The subject and comparable have the same rights and relevant characteristics except for one permanent real-property feature. Verified market evidence supports a $67,000 contributory difference: the subject has the feature and the comparable lacks it. Adjust only the comparable toward the subject. What is its adjusted price?
Correct Answer
C) $747,000
680000 + 67000 = 747000. Add because the comparable lacks the subject’s supported superior feature. The starting price, adjustment amount alone, and reversed direction do not give the requested adjusted price. The adjustment is supported contributory value, not installation cost.
Why This Is the Correct Answer
Option C is correct because the comparable lacks a feature the subject has, so its price is adjusted upward by the supported $67,000 contributory difference: $680,000 + $67,000 = $747,000. The adjustment reflects market-supported contributory value, not installation cost.
Why the Other Options Are Wrong
Option A: $680,000
Option A, $680,000, is simply the comparable's unadjusted cash-equivalent price. It ignores the supported $67,000 difference, so it is not the adjusted price; the correct figure is $680,000 + $67,000 = $747,000.
Option B: $613,000
Option B, $613,000, comes from subtracting the adjustment ($680,000 − $67,000), which reverses the direction. Subtraction applies when the comparable is superior; here the comparable is inferior, so the correct result is $680,000 + $67,000 = $747,000.
Option D: $67,000
Option D, $67,000, is only the adjustment amount, not an adjusted sale price. The adjustment must be applied to the comparable's price: $680,000 + $67,000 = $747,000.
CBS: Comp Better, Subtract
If the Comp is Better, Subtract; if the Comp is Inferior, Increase. The adjustment moves the comparable toward the subject.
How to use: Before choosing plus or minus, ask whether the comparable is better or worse than the subject on that element.
Exam Tip
Identify which property has the feature before doing any math. Answer choices often include the reversed-direction result and the raw adjustment amount as traps.
Common Mistakes to Avoid
- -Subtracting when the subject, not the comparable, has the superior feature
- -Adjusting the subject instead of the comparable
- -Using installation cost instead of market-supported contributory value
Concept Deep Dive
Analysis
This question tests the direction of a sales comparison adjustment. Adjustments are made to the comparable so that it resembles the subject. Because the subject has a feature the comparable lacks, the comparable is inferior on that element, and its price must be raised by the market-supported contributory difference.
Background Knowledge
In the sales comparison approach, each comparable's price is adjusted for differences from the subject. If the comparable is inferior to the subject on an element, its price is adjusted upward; if it is superior, its price is adjusted downward. Adjustment amounts should be supported by market evidence such as paired sales or statistical analysis.
Real-World Application
An appraiser values a house with a finished basement, and the best comparable has an unfinished basement. Paired sales in the neighborhood support a contributory difference for the finished space, so the appraiser adds that amount to the comparable's price on the grid.
More Sales Comparison Questions
Supported adjustments are: non-market financing $10,000, GLA $36/sf, garage $3,500 per car, pool/spa $12,500. A comparable identical to the 2,800 sf subject sold for $267,000 with non-market financing. What is its adjusted price?
Using GLA $36/sf and non-market financing $10,000: a 3,100 sf comparable sold for $277,000 with non-market financing; the subject has 2,800 sf. Bath count differences are not adjusted. What is the adjusted price?
Using garage $3,500 per car and pool/spa $12,500: a comparable with a 2-car garage and a pool/spa sold for $268,000. The subject has a 3-car garage and no pool. What is the adjusted price?
Using GLA $36/sf, garage $3,500 per car and pool/spa $12,500: a 2,600 sf comparable with a 2-car garage and a pool/spa sold for $264,000. The subject is 2,800 sf with a 3-car garage and no pool. What is the adjusted price?
In a neighborhood with declining values and marketing times over six months, what must Fannie Mae lenders confirm about the sales comparison analysis?
A house is a 4,000 square foot home in an area of 2,000 square foot homes. How must the appraiser treat this over-improvement in the sales comparison grid?
According to the Interagency Appraisal and Evaluation Guidelines, which items should an appraisal’s market conditions discussion include?
A comparable listed at $420,000 and sold for $399,000. What sale-to-list price ratio (sale price ÷ list price) does this indicate?
An appraiser wants to describe the neighborhood boundaries in a Fannie Mae report. Which approach is acceptable?
Which of these is listed by Fannie Mae as a sales or financing concession?
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